Speech by President Barroso: "The future of the EU – moving forward together"

University of Copenhagen

Copenhagen, 23 April 2012

Prime Minister, Rector, ladies and gentlemen, dear students,

It is a real pleasure to be here for this debate with you today. It is indeed my second time in the University of Copenhagen. Copenhagen is not only the oldest university in Denmark but also one of the most respected academic institutions in Europe. A university which sums up much of what is best about Europe, a sense of enquiry, the search for excellence, and an openness to ideas and people. It is no surprise that Helle Thorning Schmidt and many of her predecessors as Prime Minister studied here along with many other distinguished students, including an impressive number of Nobel Prize winners.

Today's students will leave the university with a wide range of attributes and skills. But despite this, I would not be surprised if many of you view the future with some concern. Across Europe the financial and economic crisis has brought instability and uncertainty. The job market is a very tough place. Levels of unemployment are unacceptably high, particularly among the young. Europeans are asking themselves if the next generation will have a better life compared to the generation before.

The immediate challenges we face are due to unsustainable public finances, financial instability and an overall lack of competitiveness. We can, and are taking short-term measures to relieve the immediate impact. These are already having an effect.

We have a second assistance package for Greece. Member States are taking measures towards fiscal consolidation and making essential structural reforms. We have strengthened regulation and supervision of the financial markets and we have put in place a reinforced system of economic governance for Europe, namely for the euro area – but not only for the euro area.

Most importantly, the European Union has committed to and is already implementing an overarching strategy for growth – Europe 2020.

But we are not yet out of the crisis and the situation remains fragile. We need to complete these reforms to restore stability which is the prerequisite for growth.

And growth is the real long term challenge in a rapidly changing world. If Europe wants to prosper in the future and maintain our values, our social models, our quality environment, we need to invest now in the changes that will ensure what we call smart inclusive sustainable growth in the future. And we must do it together. Indeed, we can only succeed if we do it together – for obvious reasons: even the biggest of our Member States simply don't have the dimension to come to agreements on an equal footing with the biggest economic poles in the world: our American friends, China and others. How can a country with 60 million people, not to speak of countries that have less than 10 million people, think that they can discuss on an equal footing with countries with 1.2 or 1.4 billion people, in the future?

The world is changing completely. We are in the 21st century now. And dimension counts. And if we want to defend our values, our social market economy; if we want to defend, for instance, our policy on climate, we need the dimension of the European Union, or we simply will not have the leverage, we simply will not have the influence, and so Member States will face irrelevance if they don't commit to a stronger European Union.

That is my real perception of these eight years I have been leading the European Commission, but that was already my position before I was in the Commission. I want to note this, because it is very important to look at the European Union it is in the 21st century, and not as it was in the middle of last century, where – by the way – the European Union was, or started as, a group of six countries. And now, we are a Union of 27. And as professor Nissen very rightly said, quoting Patočka: he was tortured in his country. And now most of Europe is free. And we have 27 countries that are united in Europe because they decided to be members of Europe. So I cannot be pessimistic, when I remember the Europe we had before. When my own country or countries of the European Union in the south were living under authoritarian regimes, we had no freedom; or all Central- and Eastern European countries were under totalitarian communist regimes. And now they are living in freedom, and are united in a continental project that is the European Union. And that is why we have to look at things in perspective.

Yes, we have a crisis. Nobody is complacent about the crisis and it is indeed a serious crisis, but if you look how Europe was 20 years, 30 years, 50 years, 60 years ago – it was in this continent that we had the shoa, it was in this continent where we had the worst moments in the history of mankind. When some countries tried to put an end to all kinds of freedom. And today we have difficulties, yes we have difficulties, but we have the dimension and the capability to face those difficulties.

And this is why I say with a great conviction that a sustainable solution to the crisis means more Europe not less Europe. And we have to fight hard against prejudice. People for instance suggesting that the crisis is a result of the euro. Simply not true. Against all facts. We have countries that are not in the euro and that are in situations that are at least as serious as those who are in the euro. We have even countries that are not in the European Union and they have the kind of problems we have. And some of them in fact are now trying to join the European Union, like Iceland for instance. It was not the euro that created the crisis. It is simply false when people say that and I am sure that in a scientific environment like this University you will resist any kind of prejudices and let's look at the facts and not just be biased by the kind of misconceptions or even prejudice. This is why we need this dimension at the European level.

To maximise the benefits to our citizens, democratically elected governments have chosen to engage in deeper integration, to pool resources and to come together to achieve results which no European state could deliver alone.

Let me take a concrete example: climate change. Acting as a Union we have a greater say in international negotiations and through our concerted actions we are setting indeed the global agenda.

We have taken a bold step by putting a price on carbon dioxide emissions. No individual Member State could have taken such a step alone.

Improving environmental standards, research and innovation are just some of the areas in which growth tomorrow depends on investment today. Here too the European Union also plays a vital role through its budget.

The EU budget channels resources into investment in infrastructure, networks and research on a European scale to support the efficiency and sustainability of our economy. In times of austerity, one euro spent in the EU budget can save several euros for national budgets.

The on-going work on the Baltic-Denmark gas interconnector is a good example of a project where only a cross-border effort can ensure energy supply and security within a European region.

The message is clear - when we are united we will benefit. Just as importantly, we all benefit from being open: both between ourselves and towards the wider world.

I don't think that I have to mention this point in Denmark. More than 60% of your exports go to the European Union Member States. Just imagine what could be the results if we started a renationalisation or fragmentation of the internal market. It could be detrimental for your companies, but for your workers, for you as young people that want one day, of course, to make a contribution to your country. That is why internal protectionism or external protectionism is simply wrong. And it does not serve our interest. Neither in the short, nor in the long term.

Openness brings benefits. Openness within Europe has brought huge benefits through the Single Market: economic growth but also new opportunities, including for students. Among the priorities for the future EU budget, we have proposed to double the number of students who can benefit from the Erasmus programme, opening opportunities for up to 5 million individuals.

We are also doing more to help young people when they leave school or university. Unemployment among those aged under 25 years is at record levels as was already stated. That is why the Commission has presented the Youth Opportunities Initiative, to help graduates get a first experience of work, to increase the mobility of young workers, and to provide 3 million euro of technical assistance to young people starting a business.

Just last week we launched a new campaign called "We mean business" which in 2012 and 2013 will create 280 000 work placements for vocational and higher education students.

We also want to help young people to turn inspired ideas into blooming businesses. The Innovation Union is one of the flagship initiatives of the Europe 2020 agenda. It aims both to strengthen research and provide the support necessary to commercialise the results. The Commission has also made proposals for a venture capital passport to improve SME financing opportunities.

And as the world's emerging economies continue to increase their contribution to global economic growth, Europe also has a clear interest in maintaining an open attitude in our external policies and encouraging others, of course, to do the same.

We must be ready to engage ever more deeply with our international partners to increase opportunities for European companies in their markets.

Dear students, I have spoken of the need for a united Europe and an open Europe. In the end it comes always to this. United Europe and open Europe. The current crisis has also shown that a common currency – the euro - requires further economic integration, greater coordination and discipline. And that was already highlighted in the introductory remarks, indeed – and this sometimes appears as a paradox since it goes against the prevailing mood – indeed the Member States have agreed at unprecedented levels on coordination and discipline of those points that were simply not acceptable, I would say really unthinkable just five years ago.

I know because we have discussed this with them some time ago. We have discussed this. It was unthinkable. We could not do it. And now precisely because the Member States have the experience of this level of interdependence they are ready to accept what was simply not admissible some time ago. Because we are really united in our market and we really need this dimension.

The Euro needs this. It is not just the federalists, it is the markets. Now the markets are asking us: "Are you ready to sustain your currency?" Not only: "What is the deficit in Greece?", but: "What is the political will of Germany?". This is the question they are asking because if you want to have a common currency we need to have some levels of integration.

That is why I insist that the Euro is the currency of the European Union. We have two countries why have opted out and we respect them, Denmark and United Kingdom, but the Euro is the currency of the EU and that is why we cannot make a division based on the Euro. Because if we make a division based on the Euro we will put at risk the internal market and the internal market is the basis, the necessary basis for growth and prosperity in Europe. That is why I want to state very clearly that we are against new divisions in the EU.

There are some mechanisms in the Treaties to reinforce cooperation: they are Treaty-based, they are the rules. But what we have to accept is that for obvious reasons, for reasons of common sense, we need more integration in governance in the Euro area. But that should be compatible with keeping the level playing field of the of the EU, of the Single Market, of the so called four freedoms – in fact not only the four freedoms of capital, services, goods and people but also the fifth freedom, the freedom of knowledge. That is why we are so committed to the European research area. And that is exactly what we are now doing.

My answer is that the necessary strengthening of integration for the euro can and should happen in a way that respects the two principles of unity and openness. And decisions on issues like the single market or cohesion which will affect all Member States must involve all Member States.

These are questions which I know are often discussed in Denmark. Your country is outside the Euro area yet your financial markets and economy are closely interconnected with it, and this interdependence impacts on the daily lives and wellbeing of Danes.

We in the European Commission are charged with ensuring that the law, the equality of Member States, and the role of the EU institutions are respected. This was the European Commission's main objective in the discussions on the Treaty on Stability, Coordination and Governance, signed by 25 Member States in March, including Denmark, which I really welcome.

This Treaty represents the very culture of financial stability that is a prerequisite for true economic union, the necessary counterpoint to monetary union.

The European Commission would have preferred this to be an EU Treaty but there was not the necessary unanimity among Member States. But the new fiscal pact fully reflects the community method, respects the role of EU institutions and includes democratic safeguards. Its content will be rolled back into the EU Treaties within five years.

I want to underline this - the European Union is a Union of law. We are not just a Union of Member States, because in the past many European countries were engaged in international cooperation in Europe, and some of the countries were simply not democratic, they were simply not respecting the rule of law. In the European Free Trade Association (EFTA) agreement there were countries that were simply not democracies. You cannot stay in the European Union if you are not a democracy and our Union is based on the rule of law. That is why this is important, because this is the way to ensure fairness, to insure for instance that the big Member States do not take decisions alone and leave the other Member States, smaller or not so rich, in a detrimental position. That is why I want to finish my point with this – we are a Union of values. Yes, it started with the common market. Yes, it started around the economic integration, but what we need now is to understand that the European Union was based with a political aim – namely the aim of peace after the two World Wars. To some extent they were in fact European civil wars. The goal is a political one, for a political future for Europe and we are based on values – the value of freedom and the value of solidarity. I think these values are something that we should stand for and have the courage to defend globally, while respecting the other partners, but being sure that we can defend our own values, what we usually call our social market economy, and we can do it in a much stronger and efficient way if we do it together.